2009-019 Finance - McGladrey & Pullen

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McGladrey& Pullen Certified Public Accountants May 12, 2009 The Members of the County Commissioners Orange County, North Carolina 200 South Cameron Street P.O. Box 8181 Hillsborough, North Carolina 27278 Attention: Ms. Valerie P. Foushee, County Commissioner Chair McGladrey & Pullen, LLP 230 North Elm St., Ste. 1100, Greensboro, NC 27401-2436 P.O. Box 2470, Greensboro, NC 27402-2470 0 336.273.4461 F 336.274.2519 www.mcgladrey.com We are pleased to submit the following information about our June 30, 2009 audit plan, including the planned scope and timing of our audit, and overall audit approach for the Orange County, North Carolina (the "County"). We believe our audit plan will satisfy our primary objective of rendering a report on the financial statements of the County as of June 30, 2009 and for the year then ended. Communication Effective two-way communication between our firm and the members of the County Commissioners is important to understanding matters related to the audit and in developing a constructive working relationship. Your insights may assist us in understanding the County and its environment, in identifying appropriate sources of audit evidence, and in providing information about specific transactions or events. We will discuss with you your oversight of the effectiveness of internal control and any areas where you request additional procedures to be undertaken. We expect that you will timely communicate with us any matters you consider relevant to the audit. Such matters might include strategic decisions that may significantly affect the nature, timing and extent of audit procedures, your suspicion or detection of fraud, or any concerns you may have about the integrity or competence of senior management. We will timely communicate to you any fraud involving senior management and other fraud that causes a material misstatement of the financial statements, illegal acts that come to our attention (unless they are clearly inconsequential), and disagreements with management and other serious difficulties encountered in performing the audit. We also will communicate to you and to management any significant deficiencies or material weaknesses in internal control that become known to us during the course of the audit. Other matters arising from the audit that are, in our professional judgment, significant and relevant to you in your oversight of the financial reporting process will be communicated to you in writing after the audit. Independence Our independence policies and procedures are designed to provide reasonable assurance that our firm and its personnel comply with applicable professional independence standards. Our policies address financial interests, business and family relationships, and nonaudit services that may be thought to bear on independence. For example, without our permission, no partner or professional employee of McGladrey & Pullen, LLP or RSM McGladrey, Inc. is permitted to own any direct financial interest or a material indirect financial interest in a client or any affiliates of a client. Also, if an immediate family member or close relative of a partner or professional employee is employed by a client in a key position, the incident must be reported and resolved in accordance with firm policy. In addition, our policies restrict certain nonaudit services that may be provided by RSM McGladrey, tnc. and require audit clients to accept certain responsibilities in connection with the provision of permitted nonattest services. ~J• McGladrey & Pullen, LLP is a member firm of RSM International - anaffiliation of separate and independent legal entities.